The question of when to file an insurance claim or not must be determined by the kind of insurance you are dealing with and the circumstances that led to the claim, as filing claims is not always smart.

Contrary to popular belief simply filing a claim will not automatically raise your insurance rates. Insurance is a competitive business and companies want you paying that premium every month. That means a lot of them will overlook questionable or small claims especially from good customers.

That being said there are some times when you should not file a claim. Filing a claim that won’t be covered won’t necessarily raise your rates but it is a waste of time and money.

When to File a Claim

A good rule of thumb is that you should always file a claim when somebody else’s policy is involved. If you are in a car accident that is another driver’s fault, definitely file a claim with their insurer. Get their information and file the claim yourself.

The same goes if you get hurt on somebody else’s property or in a business. File a claim with their insurance company and liability insurance may cover it. It won’t cost you anything and you might get some money out of it.

It is also a good idea to always file a claim with your car insurance company when you get into an accident even if you think somebody else is at fault. Insurance companies are much quicker to pay if other insurance companies get involved. You might also get reimbursed for damages faster if you report it.

You might also be in violation of your policy if you don’t report an accident. Making the claim can be a hassle but it can keep you out of trouble and prevent a policy from being revoked.

When Not to file

You should never file a claim if a loss is specifically excluded from an insurance policy. This is often the case with homeowners insurance, in which many policies specifically exclude a wide variety of losses including mold, water damage and natural disasters.

If you are unsure if a claim is excluded call the insurance company before filing a claim. It is better to know if damage is uncovered rather than to wait for a check that never comes.

Filing false or questionable claims can get you into trouble. If you develop history of questionable claims an insurer can raise your rates or even revoke your policy. In the worst case scenario the insurance company might send a private detective to investigate you.

Claims History

It is also a good idea to avoid small or questionable claims such as amounts close to the deductible, which can lead to a bad claims history. A claims history is like a credit history and it can be used by the insurer to raise rates. Some companies automatically increase rates or drop customers after a specific number of questionable claims. Others will give customers some leeway.